A joint-venture deal with Naledi Petroleum has exposed Sasol’s policy of taking over petrol stations ahead of deregulation, writes Mungo Soggot
SASOL has been quietly buying up prime petrol station sites in Gauteng in anticipation of a relaxation of regulations that bar it from retailing fuel, the synthetic fuel giant confirmed this week.
Sasol communications manager Alfonso Niemand said Sasol Oil had bought about 20 sites in the region which it had leased to other oil companies on a “strictly commercial basis”.
Sasol has previously not disclosed this strategy, which many of its rivals in the crude oil industry had long suspected.
Sasol’s buying spree in Gauteng was exposed this week after the announcement of a fuel retailing deal flagged as a “black empowerment” move. A consortium, led by Naledi Petroleum Investments and Sasol, has set up a new fuel retail company – Naledi Petroleum – in which Sasol has the minority 22,5% stake.
Geoffery-Mabule Hlabangane, chair of Naledi Petroleum, said the group would eventually develop a network of 60 retail outlets in Gauteng. He said it would build four or five of its own, while many of the rest would be bought and leased from Sasol.
Hlabangane said Sasol owned several prime sites – including top Engen “one stops” – that were leased to other oil companies. “It is a well-known fact,” he said. Naledi would take over stations when the leases had expired. Naledi, which had been poised to strike a deal with Engen, was also talking to other fuel companies.
Sasol is barred from retailing by a contract with the oil companies that is a pivotal part of the sanctions era regulations governing the fuel industry.
The other side to the contract is that the oil companies tolerate the government’s hefty subsidy to Sasol’s synthetic fuel division – the lynchpin of apartheid’s “total onslaught” oil policies. That subsidy will be phased out by 1999.
But although the contract forbids Sasol from retailing, it does not forbid it from owning sites – providing a gap for Sasol to position itself in anticipation of deregulation.
Mineral and Energy Affairs Minister Penuell Maduna has indicated he is in favour of a phased deregulation of the industry.
Sasol is the main supplier of fuel in Gauteng with its synthetic fuel plants and its Natref fuel refinery, which it owns jointly with Total SA, the local arm of the French oil company.
At the Johannesburg press conference announcing the Naledi deal, Sasol executives sat among the journalists while the consortium’s black bosses took centre stage.
Sasol, once a Broederbond stronghold, has been itching to participate in an empowerment deal since 1995 and even published a statement two years ago that it was negotiating with a black-controlled fuel company. It provided no names.
Hlabangane told the Mail & Guardian that the new company had secured a R50-million loan from the Amalgamated Banks of South Africa, much of which would be used to buy from Sasol several supply contracts – deals to provide fuel to individual businesses or, for example, army installations. The rest would go towards building up its network of stations.
He said that within three years the group wanted 40 high-volume stations in the region.
The ownership of fuel stations is governed by the Rationalisation Plan – the other pillar of the boycott-era regulations. The Ratplan divides up the country’s stations among the local representatives of the oil majors, which also enjoy guaranteed margins – the sweeteners offered to keep them here during the sanctions era.
In the case of less profitable sites, oil companies are reluctant to hand over valuable licences, in which case they are distributed on a roster basis, so that all the big majors, as well as Sasol, take turns in supplying them. Sasol has about 20 of these sites, many of which will be leased to Naledi Petroleum, in addition to its other sites.
Hlabangane confirmed that Naledi had yet to be incorporated into the Ratplan – the only stumbling block to the deal. But he was confident it would get the green light by the time Naledi opened its doors in June. He said all that remained was for the South African Petroleum Industry Association (Sapia) to give its plans the nod.
Sapia chairman Colin McLelland said the association was examining Naledi’s proposal.
Naledi’s consortium boasts the features of a typical empowerment deal. It includes the investment arms of two struggle organisations – the South African National Civics Organisation (Sanco) and the National Hostel Residents Association (Nahora).
It also includes the influential National Black Retailers Association, which has offices close to Sasol’s Randburg base. Sanco and the hostel company were brought to the party by a mysterious company called Powerlib, whose flamboyant boss, Eric Molefe, has been talking to Sasol for about two years.
Alongside Sasol’s efforts to forge ties with black business has been its close relationship with the black taxi industry. At one stage during negotiations at the National Economic Development and Labour Council this relationship was exposed as being excessively close: the taxi industry’s statement on the controversial topic of Sasol’s subsidy was identical to Sasol’s.
Hlabangane – the owner of two McDonald’s outlets who has worked at Mobil and then Engen – said he was unconcerned about Sasol’s motives for the deal.
Hlabangane insisted this was a genuine “black empowerment” deal, which would not merely enrich him and the other consortium heads as the investment arms of both Sanco and Nahora would feed back to millions of people.